Old Navy to Sail Out of China in 2020, Jettisons Entire Stock for 60 Percent Off

With no new navy to take their place, Old Navy retail stores are preparing to exit China next year, its parent company Gap inc. has announced. There are currently three Old Navy stores in central Beijing. The withdrawal is part of Gap’s plan to split Old Navy off as a separate company.

The stores will remain open at least through the end of the year, including for the Black Friday sales with discounts of 60 percent off the entire stock.

Old Navy has positioned itself as a more affordable version of Gap, a San Francisco-based brand that sells casual clothing. The former launched in China in 2014, precisely two decades after opening its first store in the United States. Company representatives have been insistent that its splintering-off from Gap does not indicate a faltering of Old Navy's sales – on the contrary, the brand accounts for more than half of Gap’s total annual revenues. Rather, Gap's spokespersons have stated that the split is due to the increasingly divergent needs of the stores’ target customers. As a result, Old Navy will be shifting its focus to North America, where it was recently named one of the best places to work.

Gap stores, meanwhile, will carry on in China, having opened the brand's largest flagship store in Shanghai in 2017. On the whole, however, the company’s future seems uncertain. Sales have been slowly declining, and its stock dropped 30 percent this year, which led to the recent resignation of CEO Art Peck, who had been overseeing the Old Navy spin-off.

The Gap brand first entered China in 2010 with both online shopping and four retail stores, including two in Beijing. Today, Beijing is home to a total of seven Gap locations.

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Images: IMA Asia, Adam Xin (via Trip Advisor)